Journal
JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY
Volume 20, Issue 1, Pages 159-193Publisher
WILEY-BLACKWELL
DOI: 10.1111/j.1530-9134.2010.00286.x
Keywords
-
Categories
Ask authors/readers for more resources
We examine the ability of linear contracts to replicate the performance of optimal unrestricted contracts in the canonical moral hazard setting with a wealth constrained, risk averse agent. We find that in a broad class of environments, the principal can always secure with a linear contract at least 95% of the profit that she secures with an optimal unrestricted contract, provided the productivity of the agent's effort is not too meager.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available